Housing loans grow 20% to Rs 3.15 lakh cr last fiscal: RBI

MUMBAI: The Reserve Bank of India on Monday said that home loan disbursals rose by 20 per cent to Rs 3.15 lakh crore in 2009-10 compared to the year-ago period, primarily helped by lower interest rate.

In its report 'Trend and Progress of Banking in India 2009-10', RBI said that while home advances rose, loans for other retail segments such as auto, consumer durables and personal purposes dropped in the last fiscal.

"The pick up in housing loan growth was partly on account of low interest rates that prevailed during most part of 2009-10 despite the fact that property prices, which had experienced a correction in 2008-09 immediately following the crisis, showed a spurt during 2009-10," the report said.

The housing loans in the 2008-09 fiscal stood at Rs 2.63 lakh crore, which marked a growth of just 4.1 per cent as against the 2007-08 financial year.

The credit card receivables also slipped during the last fiscal to Rs 21,565 crore from Rs 29,941 crore in 2008-09 financial year.

"Given that most retail sectors are rate-sensitive, credit to these sectors in future would be impacted by the emerging interest rate environment," the report said.

The apex bank is currently tightening the screws on housing loans to rein in spiralling inflation and stave off the possibility of realty bubble in the fast growing economy.

In its quarterly monetary policy this month, RBI made the norms for housing loans more stringent to curb excessive borrowing, against the backdrop of rising real estate prices. Going by estimates, property prices in most metros have touched levels that were seen before the global financial meltdown in 2008-09.

Among the steps mandated by RBI is an increase in the risk weight of high-value loans, an increase in the funds to be kept aside by banks as a cushion in case of defaults on loans made at teaser rates and bringing down the ceiling limit on housing loans to 80 per cent of the property value.

The RBI also asked banks to set aside a higher amount for controversial teaser home loans rates to act as a cushion in case of defaults. Teaser home loans are offered at low interest rates during the initial years.